Trading books

[andyfuller]

Has anyone any experience of this book:

Technical Analysis of the Futures Markets: A Comprehensive Guide to Trading Methods and Applications [Hardcover] – J Murphy

http://www.amazon.co.uk/Technical-Analy ... 651&sr=8-4

I was told it was to quote: "the bible of technical analysis." And seems to get very good reviews.

There is a study guide as well:

http://www.amazon.co.uk/Technical-Analy ... 613&sr=8-1

I have seen both books cheaper elsewhere btw.

[Ferru123]

Having spent a lot of time studying TA (and believing in it), I would be very wary.

You have to ask yourself why a particular pattern will work. IMHO, to the extent that TA works, it's only because it involves following trends.

Jeff

[andyfuller]

At this stage I am open to all ideas tbh, even the bad ones as I think you can learn just as much from bad ideas as you can from good ideas from my experience of trading sports.

So although you say to be wary I am still keen to explore this area as I am all areas.

Jeff can you do a thread on your trend following with some past examples as you aren't currently trading financials and then when you do start on them again post up some 'live' examples.

Would be much appreciated.

[Ferru123]

Jeff can you do a thread on your trend following with some past examples.

I don't have any examples to show (to cut a long story short, I haven't applied the philosphy with live money yet).

Jeff

[andyfuller]

Doesn't matter if you have actually traded them, I was just keen to see some examples, a bit of after timing at its best so to speak

Or have you not researched it on historical prices?

[Ferru123]

My research has been based on what I read.

The book Trend Following by Michael Covel presents backtested trading systems, along with the results of various trend following firms. When you consider that trend following firms make average annual profits of about 20% (and have done for years), it's hard to argue against trend following.

I also like trend following because it's philosophy appeals to me. When you sit down and ponder the question 'What do I know about markets? Indeed, what is knowable?', the answer to both questions (at least for me!) is 'Not very much!'. Markets are chaotic beasts, which means most of the rules people expect it to follow will be broken more often than not. People think they see recurring patterns, but IMHO that's usually a trick of the mind (and one I've fallen for plenty of times myself!).

After much soul searching, I realised that pretty much the only generalisations I could make about markets is that they go up, down and sideways, and those movements are the result of participants whose fear and greed causes them to make irrational decisions, where they follow the herd rather than reason. Trend following exploits those qualities, and cuts out needless complication.

Jeff

Doesn't matter if you have actually traded them, I was just keen to see some examples, a bit of after timing at its best so to speak

Or have you not researched it on historical prices?

[Ferru123]

BTW, you might like this ebook on cognitive biases: http://www.trendfollowing.com/whitepaper/decisions.pdf

Although not aimed at traders, traders and gamblers make the mistakes described in it IMHO.

Jeff

[andyfuller]

Cheers for the info, is that ebook worth popping in the book thread?

Not sure if what you said you would also apply to sports markets but if it is there most certainly are recurring patterns in sports markets. People often react in the same way time and time again, not every time but it is a percentage game.

From what I have read where you talk about sports markets and your trend following I would say you stick to a to rigid view point and need to be more flexible with it.

I don't care what the reason behind a trade is, only thing I care about is making some money from the trade. It could be a trend I am following but a second later I could be in a trade because of a spike or it could be to take advantage of some manipulation that is going on or it could be reacting to some news. I don't stick to any one set of rules and am open to everything and happy to exploit any advantage.

A jack of all trades excuse the pun

[Ferru123]

Re: The ebook - Not sure which thread you're referring to, but feel free to put the link there.

From what I have read where you talk about sports markets and your trend following I would say you stick to a to rigid view point and need to be more flexible with it.

On the contrary, I keep an open mind. To cut a long story short, I believe trend following has its limitations, and I certainly won't be using pure trend following when trending the financials.

And if someone can show me why trend following doesn't work, or convince me that there's a better method out there, then I'm all ears. But as there are several billionaire trend followers who have been using simple trend following techniques for years, I doubt I'll come across anything they've missed.

I don't care what the reason behind a trade is, only thing I care about is making some money from the trade.

Agreed. But long-term, if the maths isn't on your side, you'll lose money. Clearly, the maths is on your side, as you profit consistently. However, when you trade intuitively, all you are doing is exploiting market irrationalities, even if you don't know why what you're doing works (and that's not to belittle it - it's more than I've managed to do!).

BTW, Betfair is different to the financial markets inasmuch as it's possible to scalp for a 1 tick profit, and to scratch your trade for a net zero position. So that creates possibilities that don't exist in the financials, in that you can engage in market making as well as swing trading.

Tell me, what is your answer to the question: 'What is the nature of the markets on Betfair?'

Jeff

[mulberryhawk]

theres a pretty comprehensive reading list on the right of the link here. http://www.proptraders.net/free-prop-trader-training/